Home Equity Lines of Credit (HELOC)

Use Your Home to Get the Cash You Need

Did you know your home can provide you with needed funding? It’s not hidden in the walls, but rather resides in the equity you’ve built up in your home. You can tap into it through a Home Equity Line of Credit from Time Federal Savings Bank.

A Home Equity Line of Credit, or HELOC, can be one of the most cost-effective ways for you to use the equity in your home to obtain a revolving variable rate line of credit that's available whenever you need it.

Possible Uses for HELOCs

A HELOC is a convenient option for higher ticket items such as:

Home Improvement Projects

Auto & Recreational Vehicles

Appliances

Consolidating Higher Interest Debt

Investing in yourself - going back to school, career training or earning a certificate that will help increase your earnings

How to Estimate Your Home’s Equity

Evaluating your home’s equity is not an overly complex process, but it does take a little math. Lenders look at what is called your combined loan-to-value ratio, or CLTV. You need three numbers to find this:

The estimated value of your home

The total balance left on your mortgage

The credit limit you want to establish

For example: your home has an estimated value of $225,000, you have $150,000 on your mortgage and you want to establish a HELOC with a $25,000 limit. First, add together the balance of your mortgage and the credit limit amount:

$150,000 + $25,000 = $175,000

Then, take the sum and divide it by the current appraised value:

$175,000 ÷ $225,000 = 0.77

Converted into a percentage, this is 77%. That is your CLTV in this situation. A CLTV below 85% is optimal if you wish for your home equity line of credit to be approved.